Home > #LACfeaturegraph blog contest winner: In Latin America, education is not closing the income gap

#LACfeaturegraph blog contest winner: In Latin America, education is not closing the income gap

Submitted by Joaquín Muñoz
On Wed, 08/23/2017

Also available in: Español | Portuguese

Editor’s Note: In May, the LAC Team for Statistical Development launched the #LACfeaturegraph blog contest[1], where participants were asked to use poverty, inequality or other welfare data from the LAC Equity Lab[2] to come up with an original analysis and integrate it with a data visualization. We received numerous blog submissions and after carefully reading each blog, we have picked the winner. Here is the winning entry from Joaquín Muñoz from Chile.

Education has long been considered fundamental in paving a country’s road to development. It is an International Human Right, one of the eight Millennium Development Goals and seventeen Sustainable Development Goals, and a critical player in reducing poverty. Thus, government officials and development partners have renewed efforts to ensure access to primary and secondary education worldwide.

In Latin America and the Caribbean, a region that faces stark levels of inequality, educational programs have been designed and funded with the aim of guaranteeing equal opportunities to school access. For instance, while in 1990 primary school enrollment in the region was about 89.9 percent, by 2010 it had increased to 94.2 percent. In the same period, literacy rates progressed as well, increasing from 87.5 percent to 92.6 percent (The World Bank, 2017). Even though the difficulty of achieving universal access to education is daunting, the numbers show that the region is on the right track.

However, the figure below shows that even though there has been a significant increase in the total years of education between 2004 and 2014 among the region’s population, the top 60 percent and the bottom 40 percent have experienced unequal income gains. While both groups experienced an increase in years spent in school, the data suggest that the top 60 percent, which was already wealthier and longer-schooled, saw a greater increase in their median daily per capita income than the bottom 40 percent. This finding is consistent with other evidence that suggests that income returns to schooling differ across the wage distribution (Harmon, Oosterbeek and Walker, 2000).

Source: Author's graph using LAC Equity Lab tabulations of SEDLAC (CEDLAS and the World Bank).

Without a doubt, education is called to play a major role in the formidable challenge of boosting shared prosperity. In this respect, policymakers have the opportunity to accelerate the reduction in the income gap by leveling not only the access to education, but the benefits that accompany this access. One way to achieve this, for instance, is setting up incentives for children and youth in the bottom 40 percent to stay in school longer and pursue studies that align with the country’s labor workforce demands. This would augment their expected future income. Also, policies that encourage qualified teachers to work in low-income schools may be necessary because unfortunately, universal access alone is proving not to be sufficient.

References:

Harmon, C., Oosterbeek, H., & Walker, I. (2000). The returns to education: a review of evidence, issues and deficiencies in the literature. Centre for the Economics of Education, London School of Economics and Political Science.